State lawmakers outraged by insurer's rate hikes

Tuesday

Feb 23, 2010 at 2:47 PMFeb 23, 2010 at 2:48 PM

SACRAMENTO (AP) — California lawmakers on Tuesday said they were astonished by an attempt by Anthem Blue Cross to boost individual insurance premiums by as much as 39 percent at a time when policyholders are struggling to afford health coverage.

SACRAMENTO (AP) — California lawmakers on Tuesday said they were astonished by an attempt by Anthem Blue Cross to boost individual insurance premiums by as much as 39 percent at a time when policyholders are struggling to afford health coverage.

The Assembly Health Committee opened a hearing intended to examine the proposal by California's largest for-profit health insurer.

The increase is scheduled to take effect May 1 and would affect roughly 700,000 individual policyholders in the state.

The hearing came amid a heated national debate over health care reform and one day before a congressional committee is scheduled to question Anthem's parent company, WellPoint Inc.

"How are Californians supposed to afford health insurance with these rate increases?" Democratic Assemblyman Dave Jones of Sacramento asked while opening the hearing. "What level of profit is enough?"

Jones, who chairs the committee, said the state cannot wait for the federal government to act.

California has a responsibility to protect California consumers and businesses from "outrageous rate increases," he said.

The company has said it needs to increase premiums in part because younger, healthier people have been dropping health insurance coverage during the recession, leaving it with a pool of policyholders that is older and more dependent on health care services.

The latest increase would average 25 percent but could be as high as 39 percent for some customers who purchase individual policies.

Anthem's remaining 7.3 million customers in California are covered by employer-sponsored plans and would not be affected, company spokeswoman Kristin Binns said.